Hughes Krupica were chosen on the basis of a recommendation from a hotel broker. The recommendation and selection made proved to be a good choice.
Essential Preliminary Structuring
As usual the Seller needed to seek tax advice on the best structure for the sale so there was no immediate investment. We also needed to plan our own structure.
Critically a Memorandum of Understanding was required and there were other potential bidders interested in the property.
Hughes Krupica made sure the critical elements of the deal with the correct amount of party flexibility was captured in the memorandum of understanding.
2 Key Stages of Due Diligence to Manage Costs
We are constantly searching across market segments for new deals so we are careful to avoid repetitive and unnecessary extensive due diligence costs. Our policy is to carry out ‘preliminary critical issue’ due diligence before looking into the detail of a property selected either for management or both management and investment.
Hughes Krupica worked well within these constraints and delivered a pragmatic first overview due diligence report setting out the fundamentals relating to licensing and regulatory. The main areas were the land title history and zoning regulations.
This lead well into the commitment to a timeline for full due diligence and a completion date. Hughes Krupica then handled full due diligence, working with a seller not set up for a sale and obtaining Government records and information to assist with assessing the risks of the transaction both pre and post completion.
This due diligence was extremely important in terms of the negotiation of the conditions precedent and conditions subsequent in the full share sale and purchase agreement and other related agreements.
Drafting the Necessary
In addition to the main share sale and purchase agreement, further documentation was necessary to bring together the entire transaction. This included agreements to clarify and harmonise dispute resolution provisions; loan and security documentation; joint venture agreement and supporting declarations and waivers relating to the representations and warranties of the deal.
Hughes Krupica balanced drafting what was necessary against over elaborating points. We were very satisfied with the competency and consistency of the documents produced.
We engaged Hughes Krupica for all post completion works and for ongoing corporate secretarial and board of directors legal compliance support. This was accepted by our joint venture partner as they witnessed the competency and professionalism of Hughes Krupica working on the deal. We would definitely use Hughes Krupica again for a similar transaction and recommend Hughes Krupica to others.
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